A champion skier once told me a few things that have stuck with me:
slalom skiing is effortless, you set your position, accelerate across the wake, slow the ski down, turn around the buoy, and repeat six times;
a dedicated ski boat’s V8 engine will always beat you in a tug of war no matter how strong you are; and
where your eyes go, your body will follow.
How do these relate to business?
First, many things in business appear “easy” and repeatable, but to succeed, you have to do them well. However, not everything is as easy as it seems; many hours of practice are required for something to look effortless. Watch Steve Jobs give a presentation – it looks effortless, few or no slides, no notes, and he captivates the audience. Why? Because he practices each performance until he gets right and appearing effortless. Many sports pros believe that you need to do something 10,000 times to be able to do it effortlessly. To quote an old golfer:
“The more I practice, the luckier I get.” Garry Player
Many top sportsmen claim that when they reach a certain point of proficiency, time seems to slow down. The perceived change in time is because the body and brain are so in tune with what is occurring, that the brain can take in other outside stimuli. Therefore practice the things you want to do well until they are second nature, and you can see what else is happening in the market, rather than just focusing on those urgent things, which may not be significant.
Furthermore, not only do you have to do something exceeding well through practice, but you have to be able to do all the steps of the process as well. Returning to skiing, if you cannot slow the ski down, how well you can set your position and cross the wake is irrelevant, as you will end up coming into the buoy late. Each buoy will be later, and later, as you progress down the course, eventually, you cannot complete it. You have to do all the steps well, and it is better to do all of them at an appropriate level of proficiency rather than one exceedingly well, but the rest mediocrely. To quote the adage, “a chain is only as strong as its weakest link!” I once worked with a company that had one of the best Merger and Acquisitions due diligence teams I had ever come across, and they knew all there was to know about the target; however, their integration process was weak. As a result, few of their deals ever realized the expected benefits.
In the current business environment, corporations have downsized and let many of the employees go, giving more work to the remaining employees. What is becoming apparent is that current corporate employees are overwhelmed with the load of work they have, they don’t have time to look up and see what is happening in the market around them or think strategically. As a result, this diminishes the company’s ability to anticipate and adjust to changes and one can expect them to face much more significant problems in the future.
Don’t fight a battle you cannot win.
It is true, you cannot beat the boat in a tug of war, so don’t try. The success in skiing comes from setting the right position and using the acceleration as the boat pulls you to increase your angle of attack to the next buoy. If you do not set the correct position or you get pulled out of position, you cannot muscle your way back. Thus understand the power the boat has and use it efficiently to achieve your goals. In business, understand what variables you can and can’t influence, and focus on the ones you can change. If your competitor has developed a production process that produces the product for a price you cannot match, don’t tie your company in knots trying to match that price. Instead, develop a sustainable competitive advantage that takes price out of the equation and focus on that. The best example I have seen of this is a local wealth management firm that differentiates itself not on its performance (since most wealth management companies have similar performance) but on tying financial goals to life goals. In this case, their competitors have a hard time competing as financial performance is has been removed from the equation.
Look where you want to go
Finally, this lesson I have found applies across all sports. When trick skiing or jumping, look up not down; otherwise, you will find your body quickly heading down into the water. In slalom skiing, you need to look ahead of the buoys since you want to start turning before you reach them. If you look directly at them, you will ski right up to them and then be out of position to complete the turn. In business, you need to look at the end goal at all times. Many things will arise in business, which is very important and require a response; however, look at them and determine their relevance to the company and its end goals. The best way that I have found to do this is as follows:
Does this item impact our sustainable competitive advantage (“SCA”)? An SCA is those activities that provide high value to the customer and a strong ability to beat competitors. If the item doesn’t impact the SCA, it may be necessary, but it is not essential;
Will our clients care about its resolution? If not, then again its importance is diminished, and it moves further down the list; and
What impact will it make on our goals or Key Performance Indicators? This helps us rank it among all the other priorities.
Thus practice, practice, practice is the key. Keep practicing all the steps of your processes until the firm very proficient at all of them. Know what battles you can win and where you can’t change the dynamic that removes your weakness from the equation. Finally, focus on where you want to go, and don’t get distracted by the daily issues that arise.
Finally, get Peer Group, like Vistage, to help you with these. A group of Peers can help you see what you can win, what you can’t, and to ensure you are working towards the end goal.
© 2010 Marc Borrelli All Rights Reserved
Defining an organization’s culture as a “Family” culture reflects tolerance to subpar performance. Rather focus on those characteristics of a “family” culture that you want.
Knowing the profit of your core customers is key to building a growth model. Many companies have identified core customers that are generating a sub-optimal profit and so they cannot realize the profits they seek. Identifying the correct core customer allows you to generate profits and often operate in “Blue Ocean.”
The European Super League collapsed within days of launch due to hubris and the founder forgetting the key parts of their business model, value creation, sales, and value delivery. The collapse might bring a high price.
Many business owners want to sell at the top of the market. However, market timing is tough. Is this the best strategy? Probably not.
Working with many companies looking to grow, I am always surprised how many have not built a financial model that drives growth. I have mentioned before a financial model that drives growth? Here I am basing on Jim Collin's Profit/X, which he laid out in Good to...
As we emerge from COVID, the current employment environment makes me think of a surfing concept: “Being Caught Inside When a Big Set Comes Through.” Basically, the phrase refers to when you paddle like crazy to escape the crash of one wave, only to find that the next wave in the set is even bigger—and you’re exhausted. 2020 was the first wave, leaving us tired and low. But looking forward, there are major challenges looming on the horizon as business picks up in 2021. You are already asking a lot of your employees, who are working flat out and dealing with stress until you are able to hire more. But everyone is looking for employees right now, and hiring and retention for your organization is growing more difficult.
“Why don’t they use common sense?!” You may have said this phrase yourself, or heard it with your managers, when discussing an employee’s actions. However, the frustrated appeal to “common sense” doesn’t actually make any meaningful change in your organization. We all make decisions based on the information we have and the guides we have to use. So if the wrong decisions are being made in your organization, it’s time to examine the tools you give decision-makers.
You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.
If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.
Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.